Shared bonhomie with Urjit Patel despite differences: S Gurumurthy

NEW DELHI: Reserve Bank of India board member and Swadeshi ideologue S Gurumurthy told ET on Monday that despite his differences with RBI Governor Urjit Patel on some issues, he shared a warm bonhomie with him and felt that Patel and he could “very well understand each other’s views”.

“The reports about this ‘sword fighting’ within the board are not right. It was precisely for this reason that the RBI came out with a statement for the first time after the last meeting because it was deemed important by the governor to clear the atmosphere,” Gurumurthy said.

“It is true that several matters were discussed in the board meeting. Even in the matters of MSME, it was left to the RBI to take a call. So, I don't think it is right to say that the board asserted itself. I shared several hours of discussions with him and though we had difference of opinions, we felt we could understand each other's point of view.”


Gurumurthy also took to Twitter to explain his position, calling Patel's resignation “a shock, particularly after the cordial board meeting". His resignation is indeed setback to the efforts of convergence of views that was taking place. We will miss him," he tweeted. It was widely reported that the RBI board had played an active role in the feud between the RBI and the government, allegedly pushing the government's viewpoint.

The economic unit of the RSS Swadeshi Jagran Manch, however, called Patel's exit "a good sign for MSMEs and banks".

"There is an expectation from the Reserve bank that it should take care of both the monetary policy and the fiscal health of the economy. RBI cannot restrict its role to designing monetary policy and controlling inflation," head of Swadeshi Jagran Manch Ashwani Mahajan said, adding, "If the board was suggesting changes, it is important that the RBI addresses that and works in sync with the government.”

He further said that Patel had done "little to solve the NPA crisis which had made the banking crisis severe". “There was a time when the banking sector was going through a serious crisis. Because of the NPA crisis, banks were being strangled. It is very apparent that RBI under Patel did not effectively work towards solving the crisis."

"But we always felt he would understand issues of the ground better because he looked amenable to discussions. It is unfortunate that he resigned before that," Mahajan said.

Mahajan also said that the RBI board was not a "rubber stamp anymore" and that the RBI has to convince the board about the rationale behind its decisions. "Larger-than-life figures appointed to head regulatory bodies need to understand that systems in India and America work differently," Mahajan explained.